“Gold prices will recover this year,” HSBC’s Jim Steel said in a Dow Jones Newswires report, citing central banks’ easy-money policies and low interest rates, two factors that tend to stoke demand for gold as an alternative investment.
Indeed, gold traders “expect prices to rebound from the longest weekly losing streak in eight years as mounting concern that U.S. lawmakers are doing too little to control the budget deficit spurs demand for a protection of wealth,” Bloomberg News reported Friday.
“Euphoria over the fiscal-cliff avoidance could be short lived as all problems are not solved yet,” said Frederique Dubrion, chief investment officer of Blue Star Advisors, in the story. “There’s still a huge amount of debt. Gold is nobody’s liability, it’s the ultimate alternative currency.”
SPDR Gold Shares
Full disclosure: Tom Lydon’s clients own GLD and SLV.
